During Tuesday’s State of the Union Address, President Obama called for a federal minimum wage of $9 an hour, with an index that adjusts for inflation. As we all know, there are sound arguments both for and against a higher minimum wage.
The topic spurred my own curiosity about the wage picture is in other states and countries. Of course, the value of money is a moving target. Here’s the site I used for currency conversion.
Minimum wage in New York State at present is $7.25/hr.
Across the U.S. four states have no minimum wage (Any guesses which ones?) As best I can tell, the highest is Washington state’s $9.19/hr. Vermont comes in 3rd, at $8.60/hr.
The U.S. Department of Labor has a useful color-coded chart that shows these variations.
And outside the U.S.?
Mexico recently raised its highest minimum wage by region to 65 pesos (roughly $5.10 USD) per day.
According to various media reports, minimum wages also vary by region in China, but have been on the rise:
After 24 regions in China adjust their minimum wage standards on Jan. 1, Shenzhen will have the highest monthly minimum wage at 1,500 yuan (US$241), while Beijing will have the highest hourly salary at 15.2 yuan (US$2.43), according to data recently released by the country’s Ministry of Human Resources and Social Security.
In the UK hourly minimum wages are grouped by age or apprenticeship status, and it’s much lower for teens. For age 21 up it’s presently £6.19 ($9.58 USD).
Germany was something of a surprise. According to this article “All work and low pay” in Spiegel International the median hourly wage may be €9.62 ($12.83 USD) although that’s simply an unofficial average:
Unlike most European countries, Germany does not have a federal minimum wage. Instead, the state guarantees a “minimum standard of living” for its citizens. In practical terms, that means the government — rather than employers — ensures that people get enough money to survive. This policy is meant to provide employers with greater flexibility, and some credit it as one reason behind Germany’s low unemployment rate. But others argue that the state is simply supporting bad employment practices.
Here’s a handy chart from the Globe and Mail that lists hourly wages for OECD nations (converted to USD). Australia leads that pack at $15.96 AUD/ hr ($16.52 USD) – with much lower rates for “apprentices, juniors and trainees”.
One of the biggest arguments against minimum wage hikes is that higher costs will actually reduce hiring and over-all employment. Should the conversation include tiered wages for trainees, apprentices or younger workers? Many other countries seem quite comfortable with that.
Minimum wage in Canada varies by province or territory, and the rate does not shift for age or experience. Minimums range from a low of $9.50 CAD in Saskatchewan to $11.00 CAD in Nunavuit (where the cost of imported everything is crazy high). Ontario’s hourly minimum wage currently stands at $10.25 CAD ($10.18 USD).
Any discussion about getting by on the bottom rungs of employment should mention that the U.S. remains the only major industrialized country without some form of universal health coverage. This is not new information. As dissected in a Salon article on the health care debate from 2009:
Among the OECD’s 30 members — which include Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, South Korea, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, and the United Kingdom — there are only three lacking universal health coverage. The other two happen to be Mexico and Turkey, which have the excuse of being poorer than the rest (and until the onset of the world economic crisis, Mexico was on the way to providing healthcare to all of its citizens). The third, of course, is us.
Canadian minimum wages earners get unlimited – if basic – health care (that’s my own description). This is a priceless benefit in many households. And it has nothing to do with the job – all qualified residents (incluing many non-citizens) get provincially-administered health care, whatever their age or employment status. Eligibility requirements for OHIP (Ontario’s program) seem almost shockingly accesible from the American perspective.
The health care issue is huge, complex and contentious. But it’s hard to leave that out of any discussion about being able to survive on basic wages.
If the competition is a worker in China or Mexico, U.S. minimum wage earners come out looking OK. (Though after regional living costs are factored in, who knows?)
If the competitive comparison is minimum wage earners in Canada, Australia or most of Europe – who all have some form of health coverage – then many U.S. workers are left at a significant disadvantage.